The rupee depreciated 25 paise to 83.07 against the US dollar in early trade on Monday as a negative trend in domestic equities and firm crude oil prices weighed on investor sentiments. However, the Indian rupee opened at a 10-month low of 83.01 per dollar against Friday's close of 82.85.
Forex traders said the rupee is trading lower on strong dollar and sustained foreign fund outflows over the past few days.
At the interbank foreign exchange, the domestic unit opened at 83.04, then touched 83.07, registering a decline of 25 paise over its last close.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.17 per cent to 103.01.
Oil prices fell on Monday morning amid concerns about China's slow economic recovery and tightening supply on OPEC+ output cuts. Brent crude futures for October slipped 29 cents to $86.52 per barrel and US West Texas Intermediate crude fell to $82.95 per barrel, down by 24 cents.
The markets on Monday morning opened lower with Sensex at 65,080.53, down by 242.12 points and Nifty was at 19,339.55 with a loss of 88.75 points. NTPC, Axis Bank, Titan, ITC and Kotak Bank were the top gainers in the morning session, whereas Bajaj Finserv, Tata Motors, JSW Steel, Bajaj Finance and Tech Mahindra were among the losers.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth Rs 3,073.28 crore, according to exchange data.
India Forex Reserves
Meanwhile, India's forex reserves dropped for the third consecutive week, declining by USD 2.417 billion to USD 601.453 billion as of August 4, the Reserve Bank said on Friday.
In the previous reporting week, the overall reserves had dropped by USD 3.165 billion to USD 603.87 billion.
According to the official data released on Friday, India's industrial production growth declined to a three-month low of 3.7 per cent in June mainly due to poor showing by the manufacturing sector.
"On the domestic front, focus will be on the inflation number and an uptick could weigh on the currency. We expect the USDINR(Spot) to trade sideways and quote in the range of 82.50 and 82.90," said Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial services.
With Inputs from Agencies